On Friday, Sept. 13, 2019, the annual rebalancing of the Dow Jones Sustainability Indices (DJSI) took place. This year marks the 20-year anniversary of the DJSI World, the oldest and most iconic global corporate sustainability benchmark in existence. For the companies that have been selected for this index each year over the last two decades, this is a significant accomplishment. It reflects their sustained commitment to driving forward the improvement of sustainability-related issues across all aspects of their business, and their transparency in disclosing their performance, to become sustainability “pioneers” within their respective fields.
This year, 1,166 companies actively provided detailed insights into their corporate sustainability efforts through the SAM Corporate Sustainability Assessment (CSA). This record-breaking participation in the SAM CSA is a clear sign that the topic of sustainability has firmly cemented itself in the core business strategies of companies, and that the demand from investors for sustainability data is greater than ever.
The sustainable investment space is growing more rapidly than ever, and the variety of products, services, and benchmarks available to investors has increased significantly since the DJSI World was launched in 1999. Despite this fast-paced change, the DJSI remains the leading sustainability benchmark in the world, and after two decades it continues to serve as an important compass for companies, investors, employees, and other stakeholders as they navigate through emerging sustainability issues.
As part of the annual review of the CSA methodology, RobecoSAM focused on key financially relevant themes that are shaping the corporate sustainability landscape, including adding Cybersecurity and Privacy Protection to a number of new industries, as companies are finding themselves affected by new technology risks. Questions around product offerings in the areas of Sustainable Finance were enhanced in the Banking, Diversified Financials, and Insurance industries. Similarly, questions for companies in the Oil & Gas industry were updated to refocus on transition risks and the resilience of current business models. In addition, growing concern from investors around agricultural themes like palm oil and other raw materials led to changes in the Raw Material Sourcing criterion.
For a number of years, we have observed a growing interest from our clients and other stakeholders in the “living wage.” This is a theme that is at the heart of the UN Sustainable Development Goals —holding corporates accountable for paying their employees in an equitable and fair way, improving the livelihoods and living standards of employees and families. This year, we introduced questions on the living wage in order to collect unique data on the topic while raising awareness amongst corporates. The calculation of living wages in different countries and regions is complex, and the calculation methodologies have not yet been standardized. Based on our assessment of company responses, we see that they are only starting to tackle this topic and efforts in this area will mature over time.
We have again prepared our Annual Scoring & Methodology Review document, providing deeper insights into the major methodology changes. You can read the document here.
For more about the CSA, visit www.robecosam.com/csa.The posts on this blog are opinions, not advice. Please read our Disclaimers.